Digest
Tepid Reception for Annuities as 401k Payouts - Summary: Although employers will soon have protection against being dragged into court on charges that they didn't select the 'safest' annuity available doesn't mean that they'll now embrace annuities as a distribution option. The problem is that too few of the 52 million people who have defined-contribution accounts want to put their retirement savings into annuities.
Located at: Workforce Management (free registration may be required). Click on headline for full article.
Essentials of Automatic Contribution Arrangements - Summary: Practitioners have struggled to understand the differences and similarities between and among the various automatic contribution arrangements. This is a one page comparison of the characteristics of the various arrangements.
Located at: Sungard/Relius (PDF File). Click on headline for full article.
Cross-tested Prototype Plans - Summary: Cross-tested plans will be available as prototype plans for the first time ever in 2008. In order to accommodate this, the IRS has created plan document language and rules for a cross-tested prototype.
Located at: McKay Hochman. Click on headline for full article.
Automatic Enrollment Update and QDIA Update - Summary: From the ACA to the QACA to the EACA, this article highlights some of the issues that have been raised in client calls to McKay Hochman.
Located at: McKay Hochman. Click on headline for full article.
PPA Boosting 401k Participation, Survey Concludes - Summary: The passage of the Pension Protection Act in 2006 has led to higher participation in 401k plans, in large part due to increased implementation of automatic plan features such as automatic enrollment, according to one survey.
Located at: Workforce Management (free registration may be required). Click on headline for full article.
A Better Way to Default - Summary: With automatic enrollment quickly becoming a standard, companies are looking for better returns on the default options they offer 401k participants who don't like to choose.
Located at: Treasuryandrisk.com. Click on headline for full article.
Towers Perrin U.S. Legislative Tracking Chart -- Retirement - Summary: This chart summarize selected federal legislation that would affect employer benefit programs. The bills included on the charts are based on judgments regarding the prominence of the issue, the likelihood of enactment, and the influence of the sponsors.
Located at: Towers Perrin (PDF File). Click on headline for full article.
Filling America's Empty Nest Eggs - The Crisis Nobody's Talking About - Summary: White Paper. The Australian authorities have managed to create a compact between employers and employees alike that "we're all in this together" and continually tweak the system to improve it based on their perception of retirement readiness among population cohorts. The country that perfected Democracy should be able to do at least as well.
Located at: 401khelpcenter.com (PDF File). Click on headline for full article.
DOL and IRS Items
Proposed Rules on Diversification Requirements for Certain Defined Contribution Plans - Summary: This document contains proposed IRS regulations under section 401(a)(35) of the Internal Revenue Code relating to diversification requirements for certain defined contribution plans and to publicly traded employer securities. These regulations will affect administrators of, employers maintaining, participants in, and beneficiaries of defined contribution plans that are invested in employer securities.
Located at: Benefitslink.com (PDF File). Click on headline for full article.
IRS Issues Proposed Regulations on Diversification Requirements for Publicly Traded Employer Securities - Summary: The new proposed regulations are required reading for any employer that maintains a defined contribution plan subject to the diversification requirements. No doubt many such employers will choose to rely upon the proposed regulations, instead of Notice 2006-107, until final regulations become effective, since the proposed regulations are more flexible than the notice in many respects.
Located at: Employee Benefits Institute of America. Click on headline for full article.
IRS Proposes Regulations on Automatic Contribution Arrangements - Summary: The IRS has issued proposed regulations on automatic contribution arrangements under the Pension Protection Act of 2006 (PPA). The proposed regulations address the special 401k nondiscrimination test safe harbor for qualified automatic contribution arrangements.
Located at: Watson Wyatt Worldwide. Click on headline for full article.
DOL Finalizes Qualified Default Investment Alternative Regulation - Summary: The safe harbor generally allows three types of QDIAs: life-cycle or targeted-retirement-date funds, balanced funds and professionally managed accounts. The final regulation took effect December 24, 2007.
Located at: Watson Wyatt Worldwide. Click on headline for full article.
Headline News
Labor Department Announces FY 2007 Enforcement Results
